DCIT, NEW DELHI vs. SH. P.K. SHARMA, NEW DELHI

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ITSSA 2/DEL/2015Status: DisposedITAT Delhi23 December 20255 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the assessment order dated 30/03/2013, passed under Section 147 r.w. Section 143(3) of the Act, was erroneous and without jurisdiction. The reasoning was that the Revenue had previously accepted the CIT(A)'s order dated 29/07/2011, which had quashed the assessment framed under Section 158 BC, by not filing an appeal against it. Since the Revenue accepted that earlier order, it had no legal basis to initiate fresh assessment proceedings under Section 147 r.w. Section 143(3) of the Act. The Tribunal found no merit in the Revenue's appeal. The operative direction was to dismiss the Revenue's appeal. The Assessee's cross-objection was dismissed as infructuous. No issue was expressly left undecided.

What were the facts?

The Revenue (DCIT) filed an appeal and the Assessee (Sh. P. K. Sharma, through L/H Ms. Rowena Sharma) filed a cross-objection challenging the order of the CIT(A) dated 06/05/2015, pertaining to the block period 01/04/1987 to 08/05/1997. Previously, the Hon'ble High Court, in its judgment dated 07/08/2009, permitted the Revenue to initiate proceedings against the Assessee under Section 153(3) of the Act. Following this, the AO framed an assessment under Section 158 BC on 22/12/2010, which was quashed by the CIT(A) on 29/07/2011 for procedural irregularities, specifically the failure to initiate reassessment proceedings. The Revenue did not appeal this order. Subsequently, the Revenue initiated fresh assessment proceedings under Section 147 r.w. Section 143(3) and passed an order on 30/03/2013. The Assessee challenged this before the CIT(A), who allowed the appeal on merits. The Revenue then filed the present appeal.

What were the issues?

1. Whether the assessment order dated 30/03/2013, passed under Section 147 r.w. Section 143(3) of the Income Tax Act, 1961, is valid and tenable in law, given the prior quashing of an assessment order by the CIT(A) and the Revenue's failure to appeal that decision. Assessee's Contention: The Assessee argued that since the Revenue accepted the CIT(A)'s order dated 29/07/2011 (which quashed the assessment under Section 158 BC) by not filing an appeal, it was not open for the Revenue to initiate fresh assessment proceedings under Section 147 r.w. Section 143(3). The framing of the assessment order dated 30/03/2013 was therefore erroneous and without jurisdiction. Revenue's Contention: The judgment does not record any specific contentions made by the Revenue regarding the validity of the assessment order dated 30/03/2013. However, their appeal against the CIT(A)'s order allowing the Assessee's appeal implies a challenge to the CIT(A)'s findings.

Which sections of the Income-tax Act were involved?

Section 153(3),Section 158 BC,Section 147,Section 143(3)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI

For Appellant: CA & Sh. J. P. Sharma
For Respondent: Ms. Monika Singh, CIT-DR
Hearing: 20/11/2025Pronounced: 23/12/2025

PER YOGESH KUMAR, U.S. JM: The captioned Appeal is filed by the Revenue and Cross

Objection filed by the Assessee challenging the order of Ld.

Commissioner of Income Tax (Appeals)-V, New Delhi (Ld. CIT(A)’ for

short), dated 06/05/2015 pertaining toBlock Period 01/04/1987 to

08/05/1997.

2.Heard both the parties and perused the material. The Hon'ble High

Court vide Judgment dated 07/08/2009 in ITA No. 516/2009 in

the case of Kuber Floritech Ltd., extended the liberty to the

2 IT(SS)A No. 2/Del/2015& C.O No.68/Del/2016 DCIT VS. Sh. P. K. Sharma Revenue to initiate proceedings against the Assessee. For the

sake of convenience, the operative portion of the Judgment of

Hon'ble High Court of Delhi dated 07/08/2009 is reproduced as

under:-

“Thus, when the Department is not remediless and the contentions of the Assessee that these shares were purchased by sh. P. K. Sharma and in that situation, additions should have been made in the hands of Sh. P. K. Sharma and not in the case of the Assessee, it would be open to the Revenue to initiate proceedings by treating the same under Section 153(3) of the Act as income in the hands of Sh. P. K. Sharma, in accordance with law.”

3.

Based on the above liberty extended by the Hon'ble High

Court, Ld. A.O. framed an assessment u/s 158 BC of the Income

Tax Act, 1961 ('Act' for short) on 22/12/2010. The said

assessment order dated 22/12/2010 has been challenged by the

Assessee before the Ld. CIT(A). The Ld. CIT(A) vide order dated

29/07/2011, quashed the assessment in following manners:-

“What was required to be done at the level of the A.O. was to first initiate reassessment proceedings and then follow the assessment proceedings. However, a perusal of records reveals that the A.O. has not initiated any reassessment proceedings either u/s 147/148 read with Section 153(3) or u/s 158 BC of the I.T Act. Instead, he has straight away issued notice u/s 143(2) dated 01/02/2010 as if the assessment in the case of the appellant was set-aside by the Hon'ble High Court. Which, in my view, was not possible under the law.”

3 IT(SS)A No. 2/Del/2015& C.O No.68/Del/2016 DCIT VS. Sh. P. K. Sharma 4. It is observed that the Department chose not to file Appeal

against the order of the Ld. CIT(A) dated 29/07/2011. However,

once again assessment proceedings u/s 147 r.w. Section 143(3)

of the Act has been initiated against the Assessee and vide

assessment order dated 30/03/2013passed under Section147

r.w. Section 143(3) of the Act, made certain additions. The said

assessment order dated 30/03/2013 has been called in question

by the Assessee before the Ld. CIT(A) and the Ld. CIT(A) vide

order dated 06/05/2015, allowed the Appeal of the Assessee on

merits. Aggrieved by the order of the Ld. CIT(A) dated

06/05/2015, the Department preferred the present Appeal and

Assessee has also filed the Cross Objection.

5.

In the present case, there is no dispute that in view of the

liberty granted by the Hon'ble High Court vide its Judgment

dated 07/08/2009, A.O. passed an assessment order on

22/12/2010 under Section u/s 158 BC of the Act. Subsequently

the said assessment order dated 22/12/2010 has been quashed

by the Ld. CIT(A) vide order dated 06/05/2015. The Revenue

chose not to file Appeal against the order of the Ld. CIT(A) dated

06/05/2015. Since no Appeal has been filed by the Department

and accepted the order of the Ld. CIT(A) dated 06/05/2015, there

4 IT(SS)A No. 2/Del/2015& C.O No.68/Del/2016 DCIT VS. Sh. P. K. Sharma

is no room for the Revenue to once again proceed u/s 147 r.w.

Section 143(3) of the Act and to frame the assessment. In view of

the same, we are of the opinion that the framing of assessment

order under Section 147 r.w. Section 143(3) of the Act dated

30/03/2013 itself is erroneous and without jurisdiction. Thus,

we find no merits in the Appeal of the Revenue. Accordingly,

appeal of the Revenue in IT(SS)A No. 2/Del/2015 is hereby

dismissed. Since we have dismissed the Appeal of the Revenue,

the C.O No. 68/Del/2016 filed by the Assessee is dismissed as

in-fructuous.

Order pronounced in the open court on 23rd December, 2025

Sd/- Sd/-

(NAVEEN CHANDRA) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Date:-23.12.2025 R.N, Sr.P.S* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT

ASSISTANT REGISTRAR ITAT, NEW DELHI

5 IT(SS)A No. 2/Del/2015& C.O No.68/Del/2016 DCIT VS. Sh. P. K. Sharma

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